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Alcan finally beats Sterlite to win Indal

The Indian Aluminium -- Indal -- takeover battle finally came to an end with the Indian financial institutions agreeing to sell their stake to promoter Canadian Aluminium, Alcan.

Alcan announced that it had bought 15,900 shares from the open market at Rs 200 per share. This move attarcted the financial institutions who agreed to part with some of their stake to give Alcan a majority holding in Indal. As per the SEBI Takeover Code, this means that Alcan will now have to buy all the remaining shares at the same price.

In the battle for Indal, Sterlite's had last month made a final offer of Rs 221 per share in its bid to takeover Indal by seeking a 52.03 per cent stake. The open offer made by both Alcan and Sterlite for stakes in Indal closed on June 2.

Sterlite Industries had offered Rs 131 in cash and the balance was to be paid through an issue of optionally convertible preference shares. The Sterlite offer suffered a setback after the Securities and Exchange Board of India said on June 1 that the offer amounted to preferential allotment, and would be subject to adherence to guidelines.

This forced Sterlite to announce that the company may not be in a position to accept the shares received under their open offer as the required approvals had not been obtained. Now Sterlite officials are hinting at dragging SEBI to court on the validity of the judgement.

Alcan, which currently holds 34.6 per cent, will purchase 20 per cent from the financial institutions, giving it a majority stake of 54.6 per cent stake in Indal. The financial institutions concerned are Unit Trust of India (which hold 15.9 per cent), Life Insurance Corporation (15.4 per cent), and General Insurance of India (4.8 per cent). These three institutions will sell their shares in proportion to give Alcan 20 per cent.

Alcan refused to comment on whether Sterlite could come in as a minority stakeholder.

The Saga

February 16: Sterlite bids for a 20 per cent stake in Indal, offering Rs 90 per share;
March 4: Alcan counters by offering Rs 105 per share;
March 20: Sterlite gives offer price of Rs 115 per share;
April 28: Alcan counters by offering Rs 120;
May 24: Alcan makes an offer of Rs 175 per share; Sterlite decides to seek 52.03 per cent share of the Indal and offers a price of Rs 221 (Rs 131 cash and Rs 90 as optionally convertible preferential shares).

June 2: Alcan clinched the deal at Rs 200 per share.